Federal Deposit Insurance Corporation

Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass-Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. Funds in non-interest bearing transaction accounts are fully insured, with no limit, under the temporary Transaction Account Guarantee Program. However, not all banks are participating in the TLGP/TAGP.

On January 1, 2010, the standard coverage limit will return to $100,000 for all deposit categories except IRAs and Certain Retirement Accounts, which will continue to be insured up to $250,000 per owner.

Insured deposits are backed by the full faith and credit of the United States.

The vast number of bank failures caused by runs on the bank in the Great Depression spurred the United States Congress to create an institution to guarantee deposits held by commercial banks, inspired by the Commonwealth of Massachusetts and its Depositors Insurance Fund (DIF).

The FDIC insures accounts at different banks separately. For example, a person with accounts at two separate banks (not merely branches of the same bank) can keep funds up to the insurance limit in each account and be insured for the total deposited. Also, accounts in different ownerships (such as beneficial ownership, trusts, and joint accounts) are considered separately for the insurance limit. Under the Federal Deposit Insurance Reform Act of 2005, Individual Retirement Accounts are insured to $250,000.

The 19th century economy of the United States was characterized by occasional bank panics, with corresponding economic downturns and unemployment. After the particularly severe Panic of 1893, legislators sought to arrange better security for bank deposits. William Jennings Bryan, for example, proposed a national bank guarantee fund for use during bank runs. Although deposit security measures were adopted over time at the state level, the federal government chose a "lender of last resort" approach in the 1913 foundation of the Federal Reserve System.

This combined state-federal system failed to prevent a bank panic in 1933, at the end of Herbert Hoover's term as president. The panic saw 4,004 banks closed, with an average of $900,000 in deposits. Under the federal government's supervision, these banks were merged into stronger banks. Many months later, depositors received compensation for roughly 85% of their former deposits. Incoming President Franklin D. Roosevelt, a former banker himself, did not like the insurance approach, but he agreed to it to restore confidence in the banking system.

In May 1933, the U.S. House Banking and Currency Committee submitted a bill that would insure deposits 100 percent to $5,000, and after that on a sliding scale; it would be financed by a small assessment on the banks. However the U.S. Senate Banking Committee reported a bill that excluded banks that were not members of the Federal Reserve System. Senator Arthur Vandenberg rejected both bills because neither contained a ceiling on the guarantees. He proposed an amendment covering all banks, beginning by using a temporary fund and a $2,500 ceiling. It was passed as the Glass-Steagall Deposit Insurance Act in June 1933 with Steagall's amendment that the program would be managed by the new Federal Deposit Insurance Corporation. The act established the FDIC as a temporary government corporation and gave the FDIC the authority to regulate and supervise state non-member banks; it extended federal oversight to all commercial banks for the first time, and prohibited banks from paying interest on checking accounts. The act funded the FDIC with $289 million in initial loans from the United States Treasury and the Federal Reserve, loans which the FDIC repaid in 1948.

Led by Chicago banker Walter J. Cummings, Sr., the FDIC soon included almost all the country's 19,000 banking offices. Insurance started January 1, 1934. President Franklin D. Roosevelt was personally opposed to insurance because he thought it would protect irresponsible bankers, but yielded when he saw Congressional support was overwhelming. In early 1934, Roosevelt appointed Leo Crowley, a Wisconsin banker, as the second head of FDIC. Crowley, Roosevelt soon learned, did not have an unblemished record as a banker in Wisconsin. After some anguish, Roosevelt kept Crowley on and ignored his detractors. The outstanding public service of Leo Crowley was not generally known until 1996.

The Banking Act of 1935 established the FDIC as a permanent agency of the government and provided for deposit insurance up to $5,000. The Federal Deposit Insurance Act of 1950 increased the insurance limit to $10,000, gave the FDIC the authority to lend to any insured bank in danger of closing if the operation of the bank is essential to the local community, and authorized the FDIC to examine national and state member banks for their insurance risk.

The FDIC deposit insurance limit was increased to $15,000 in 1966, and in 1969, to $20,000. In 1974, Congress increased the limit to $40,000. A deposit insurance limit of $100,000 was enacted in 1980 by the Depository Institutions Deregulation and Monetary Control Act of 1980. On October 3, 2008, the deposit insurance was temporarily raised to $250,000 per depositor through December 31, 2009.

Federal deposit insurance received its first large-scale test in the late 1980s and early 1990s during the savings and loan crisis (which also affected commercial banks).

The brunt of the crisis fell upon a parallel institution, the Federal Savings and Loan Insurance Corporation (FSLIC), created to insure savings and loan institutions (S&Ls, also called thrifts). Due to a confluence of events, much of the S&L industry was insolvent, and many large banks were in trouble as well. The FSLIC became insolvent and merged into the FDIC. Thrifts are now overseen by the Office of Thrift Supervision, an agency that works closely with the FDIC and the Comptroller of the Currency. (Credit unions are insured by the National Credit Union Administration.) The primary legislative responses to the crisis were the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), and Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).

This crisis cost taxpayers an estimated $150 billion to resolve.

As a result of the current economic and financial crisis, over 30 U.S. banks have become insolvent and have been taken over by the FDIC since 2008. Combined, these banks held over $55 billion in deposits, and the takeovers cost the federal government an estimated $17 billion.

There were two separate FDIC funds; one was the Bank Insurance Fund (BIF), and the other was the Savings Association Insurance Fund (SAIF). The latter was established after the savings & loans crisis of the 1980s. The existence of two separate funds for the same purpose led to banks attempting to shift from one fund to another, depending on the benefits each could provide. In the 1990s, SAIF premiums were at one point five times higher than BIF premiums; several banks attempted to qualify for the BIF, with some merging with institutions qualified for the BIF to avoid the higher premiums of the SAIF. This drove up the BIF premiums as well, resulting in a situation where both funds were charging higher premiums than necessary.

Then Chairman of the Federal Reserve Alan Greenspan was a critic of the system, saying that "We are, in effect, attempting to use government to enforce two different prices for the same item – namely, government-mandated deposit insurance. Such price differences only create efforts by market participants to arbitrage the difference." Greenspan proposed "to end this game and merge SAIF and BIF".

In February, 2006, President George W. Bush signed into law the Federal Deposit Insurance Reform Act of 2005. The FDIRA contains technical and conforming changes to implement deposit insurance reform, as well as a number of study and survey requirements. Among the highlights of this law was merging the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) into a new fund, the Deposit Insurance Fund (DIF). This change was made effective March 31, 2006. The FDIC maintains the DIF by assessing depository institutions an insurance premium. The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.

A March 2008 memorandum to the FDIC Board of Directors shows a 2007 year-end Deposit Insurance Fund balance of about $52.4 billion, which represented a reserve ratio of 1.22% of its exposure to insured deposits totaling about $4.29 trillion. The 2008 year-end insured deposits were projected to reach about $4.42 trillion with the reserve growing to $55.2 billion, a ratio of 1.25%.

As of September 2008, the DIF had a balance of $45 billion. Bank failures typically represent a cost to the DIF because FDIC, as receiver of the failed institution, must liquidate assets that have declined substantially in value while at the same time making good on the institution's deposit obligations. In July 2008, IndyMac Bank failed and was placed into receivership. The failure was initially projected by the FDIC to cost the DIF between $4 billion and $8 billion, but shortly thereafter the FDIC revised its estimate upward to $8.9 billion. Due to the failures of IndyMac and other banks, the DIF fell in the second quarter of 2008 to $45.2 billion.. The decline in the insurance fund's balance caused the reserve ratio (fund's balance divided by the insured deposits) to fall to 1.01 percent as at 30 June 2008, down from 1.19 percent in the prior quarter. Once the ratio falls below below 1.15 percent, FDIC is required to develop a restoration plan to replenish the fund, which is expected to involve requiring higher contributions from banks which deal in riskier activities.

In light of apparent systemic risks facing the banking system, the adequacy of FDIC's financial backing has come into question. Beyond the funds in the Deposit Insurance Fund above and the FDIC's power to charge insurance premia, FDIC insurance is additionally assured by the Federal government. According to the FDIC.gov website (as of January 2009), "FDIC deposit insurance is backed by the full faith and credit of the United States government". This means that the resources of the United States government stand behind FDIC-insured depositors." The statutory basis for this claim is less than clear. Congress, in 1987, passed a non-binding resolution to this effect , but there appear to be no laws strictly binding the government to make good on any insurance liabilities unmet by the FDIC.

When a bank becomes undercapitalized the FDIC issues a warning to the bank. When the number drops below 6% the FDIC can change management and force the bank to take other corrective action. When the bank becomes critically undercapitalized the FDIC declares the bank insolvent and can take over management of the bank.

Accounts at different banks are insured separately. All branches of a bank are considered to form a single bank. Also, an Internet bank that is part of a brick and mortar bank is not considered to be a separate bank, even if the name differs. FDIC publishes a guide entitled Your Insured Deposits setting forth the general contours of FDIC deposit insurance, and addressing common questions asked by bank customers about deposit insurance.

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Federal government of the United States

The federal government of the United States is the central current reigning United States governmental body, established by the United States Constitution. The federal government has three branches: the legislative, executive, and judicial. Through a system of separation of powers and the system of "checks and balances," each of these branches has some authority to act on its own, some authority to regulate the other two branches, and has some of its own authority, in turn, regulated by the other branches. The policies of the federal government have a broad impact on both the domestic and foreign affairs of the United States. In addition, the powers of the federal government as a whole are limited by the Constitution, which, per the Tenth Amendment, gives all power not directed to the National government, to the State level, or to the people.

The seat of the federal government is in the federal district of Washington, D.C.

The United States Congress is the legislative branch of the federal government. It is bicameral, comprising the House of Representatives and the Senate. The House of Representatives consists of 435 voting members, each of whom represents a congressional district and serves for a two-year term. In addition to the 435 voting members there are five non-voting members, consisting of four delegates and one resident commissioner. There is one delegate each from the District of Columbia, Guam, Virgin Islands, and American Samoa, and the resident commissioner is from Puerto Rico. House seats are apportioned among the states by population; in contrast, each state has two Senators, regardless of population. There are a total of 100 senators (as there are currently 50 states), who serve six-year terms (one third of the Senate stands for election every two years). Each congressional chamber (House or Senate) has particular exclusive powers—the Senate must give "advice and consent" to many important Presidential appointments, and the House must introduce any bills for the purpose of raising revenue. However, the consent of both chambers is required to make any law. The powers of Congress are limited to those enumerated in the Constitution; all other powers are reserved to the states and the people. The Constitution also includes the "Necessary and Proper Clause", which grants Congress the power to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers." Members of the House and Senate are elected by first-past-the-post voting in every state except Louisiana and Washington, which have runoffs.

The Constitution does not specifically call for the establishment of Congressional committees. As the nation grew, however, so did the need for investigating pending legislation more thoroughly. The 108th Congress (2003-2005) had 19 standing committees in the House and 17 in the Senate, plus four joint permanent committees with members from both houses overseeing the Library of Congress, printing, taxation, and the economy. In addition, each house can name special, or select, committees to study specific problems. Because of an increase in workload, the standing committees have also spawned some 150 subcommittees.

The Constitution grants numerous powers to Congress. These include the powers to levy and collect taxes, provide for common defense and promote the pursuit of liberty; to coin money and regulate its value; provide for punishment for counterfeiting; establish post offices and roads, promote progress of science, create courts inferior to the Supreme Court, define and punish piracies and felonies, declare war, raise and support armies, provide and maintain a navy, make rules for the regulation of land and naval forces, provide for, arm, and discipline the militia, exercise exclusive legislation in the District of Columbia, and make laws necessary and proper to execute the powers of Congress.

Congressional oversight is intended to prevent waste and fraud, protect civil liberties and individual rights, ensure executive compliance with the law, gather information for making laws and educating the public, and evaluate executive performance.

All executive power in the federal government is vested in the President of the United States, although power is often delegated to the Cabinet members and other officials. The President and Vice President are elected as 'running mates' for a maximum of two four-year terms by the Electoral College, for which each state, as well as the District of Columbia, is allocated a number of seats based on its representation (or ostensible representation, in the case of D.C.) in both houses of Congress.

The Executive branch consists of the President and delegates. The President is both the head of state and government, as well as the military commander-in-chief (only when called into actual military services), chief diplomat and chief of party. The President, according to the Constitution, must "take care that the laws be faithfully executed." The President presides over the executive branch of the federal government, a vast organization numbering about 4 million people, including 1 million active-duty military personnel. The current president is Barack Obama.

The President may sign legislation passed by Congress into law, or may veto it, preventing it from becoming law unless two-thirds of both houses of Congress vote to override the veto. The President may, with the consent of two-thirds of the Senate, make treaties with foreign nations. The President may be impeached by a majority in the House and removed from office by a two-thirds majority in the Senate for "treason, bribery, or other high crimes and misdemeanors." The President may not dissolve Congress or call special elections, but does have the power to pardon, or release, criminals convicted of offenses against the federal government (except in cases of impeachment), enact executive orders, and (with the consent of the Senate) appoint Supreme Court justices and federal judges.

The Vice President is the second-highest executive official of the government. As first in the United States presidential line of succession, the Vice President becomes President upon the death, resignation, or removal of the President, which has happened nine times in U.S. history. His only other constitutional duty is to serve as President of the Senate and break any tie votes in the Senate.

The relationship between the President and the Congress reflects that between the English monarchy and parliament at the time of the framing of the United States Constitution. While the President can directly propose legislation (for instance, the federal budget), he must rely on supporters in Congress to support and promote his legislative agenda. After identical copies of a particular bill have been approved by a majority of both houses of Congress, the President's signature is required to make these bills law; in this respect, the President has the power to veto congressional legislation. Congress can override a presidential veto with a two-thirds majority vote from both houses. The ultimate power of Congress over the President is that of impeachment or removal of the elected President through a House vote, a Senate trial, and a Senate vote (by two-thirds majority in favor). Nearly every president is threatened with the idea of impeachment, but only two Presidents (Andrew Johnson and Bill Clinton) have ever been successfully impeached, and neither was convicted by the Senate. Richard Nixon was not impeached in connection with the Watergate scandal, although the House Judiciary Committee had approved articles of impeachment against Nixon at the time he resigned.

The President makes around 2,000 executive appointments, including members of the Cabinet and ambassadors, which must be approved by the Senate; the President can also issue executive orders and pardons, and has other Constitutional duties, among them the requirement to give a State of the Union Address to Congress from time to time (usually once a year). (The Constitution does not specify that the State of the Union address be delivered in person; it can be in the form of a letter, as was the practice during most of the 19th century.) Although the President's constitutional role may appear to be constrained, in practice, the office carries enormous prestige that typically eclipses the power of Congress. The Vice President is first in the line of succession, and is the President of the Senate ex officio, with the ability to cast a tie-breaking vote. The members of the President's Cabinet are responsible for administering the various departments of state, including the Department of Defense, the Justice Department, and the State Department. These departments and department heads have considerable regulatory and political power, and it is they who are responsible for executing federal laws and regulations.

The day-to-day enforcement and administration of federal laws is in the hands of the various federal executive departments, created by Congress to deal with specific areas of national and international affairs. The heads of the 15 departments, chosen by the President and approved with the "advice and consent" of the U.S. Senate, form a council of advisers generally known as the President's "Cabinet". In addition to departments, there are a number of staff organizations grouped into the Executive Office of the President. These include the White House staff, the National Security Council, the Office of Management and Budget, the Council of Economic Advisers, the Office of the U.S. Trade Representative, the Office of National Drug Control Policy and the Office of Science and Technology Policy. The employees in these United States government agencies are called federal civil servants.

There are also independent agencies such as the United States Postal Service, the National Aeronautics and Space Administration (NASA), the Central Intelligence Agency (CIA), the Environmental Protection Agency, and the United States Agency for International Development. In addition, there are government-owned corporations such as the Federal Deposit Insurance Corporation and the National Railroad Passenger Corporation.

By law, each agency must submit an annual Section 300 report to the President's Office of Management & Budget.

This is part of a larger set of more extensive annual requirements called Circular A-11. Section 300 specifically covers planning, budgeting, acquisition, and management of capital assets. The details on how agencies collect and share information and how they are upgrading and improving their information technology decisions are becoming increasingly important. Within Section 300 there is a special exhibit called Exhibit 53 which gives extensive details on agency information technology investments. These investments make up most of the information technology investments from the annual budgets. For the fiscal year 2008's budget, that spending exceeds $66.4 billion..

The Supreme Court is the highest court in the federal court system. The court deals with matters pertaining to the federal government, disputes between states, and interpretation of the United States Constitution, and can declare legislation or executive action made at any level of the government as unconstitutional, nullifying the law and creating precedent for future law and decisions. Below the Supreme Court are the courts of appeals, and below them in turn are the district courts, which are the general trial courts for federal law.

Separate from, but not entirely independent of, this federal court system are the individual court systems of each state, each dealing with its own laws and having its own judicial rules and procedures.

The supreme court of each state is the final authority on the interpretation of that state's laws and constitution. A case may be appealed from a state court to the U.S. Supreme Court only if there is a federal question (an issue arising under the U.S. Constitution, or laws/treaties of the United States). The relationship between federal and state laws is quite complex; together, they form the U.S. law.

The federal judiciary consists of the U.S. Supreme Court, whose justices are appointed for life by the President and confirmed by the Senate, and various "lower" or "inferior courts," among which are the courts of appeals and district courts.

The first Congress divided the nation into judicial districts and created federal courts for each district. From that beginning has evolved the present structure: the Supreme Court, 13 courts of appeals, 94 district courts, and two courts of special jurisdiction. Congress retains the power to create and abolish federal courts, as well as to determine the number of judges in the federal judiciary system. It cannot, however, abolish the Supreme Court.

There are three levels of federal courts with general jurisdiction, meaning that these courts handle criminal cases and civil law suits between individuals. The other courts, such as the bankruptcy courts and the tax court, are specialized courts handling only certain kinds of cases. The bankruptcy courts are branches of the district courts, but technically are not considered part of the "Article III" judiciary because their judges do not have lifetime tenure. Similarly, the tax court is not an Article III court.

The U.S. district courts are the "trial courts" where cases are filed and decided. The United States courts of appeals are "appellate courts" that hear appeals of cases decided by the district courts, and some direct appeals from administrative agencies. The Supreme Court hears appeals from the decisions of the courts of appeals or state supreme courts (on constitutional matters), as well as having original jurisdiction over a very small number of cases.

The judicial power extends to cases arising under the Constitution, an Act of Congress, or a U.S. treaty; cases affecting ambassadors, ministers, and consuls of foreign countries in the U.S.; controversies in which the U.S. government is a party; controversies between states (or their citizens) and foreign nations (or their citizens or subjects); and bankruptcy cases. The Eleventh Amendment removed from federal jurisdiction cases in which citizens of one state were the plaintiffs and the government of another state was the defendant. It did not disturb federal jurisdiction in cases in which a state government is a plaintiff and a citizen of another state the defendant.

The power of the federal courts extends both to civil actions for damages and other redress, and to criminal cases arising under federal law. Article III has resulted in a complex set of relationships between state and federal courts. Ordinarily, federal courts do not hear cases arising under the laws of individual states. However, some cases over which federal courts have jurisdiction may also be heard and decided by state courts. Both court systems thus have exclusive jurisdiction in some areas and concurrent jurisdiction in others.

The Constitution safeguards judicial independence by providing that federal judges shall hold office "during good behaviour"; in practice, this usually means they serve until they die, retire, or resign. A judge who commits an offence whilst in office may be impeached in the same way as the President or other officials of the federal government. U.S. judges are appointed by the President, subject to confirmation by the Senate. Another Constitutional provision prohibits Congress from reducing the pay of any judge. Congress is able to set a lower salary for all future judges that take office after the reduction, but may not decrease the rate of pay for judges already in office.

Suffrage, commonly known as the ability to vote, has changed significantly over time. In the early years of the United States, voting was considered a matter for state governments, and was commonly restricted to white men who owned land. Direct elections were mostly held only for the U.S. House of Representatives and state legislatures, although what specific bodies were elected by the electorate varied from state to state. Under this original system, both senators representing each state in the U.S. Senate were chosen by a majority vote of the state legislature. Since the ratification of the Seventeenth Amendment in 1913, members of both houses of Congress have been directly elected.

Today, partially due to the Twenty-sixth Amendment, U.S. citizens have almost universal suffrage from the age of 18, regardless of race, gender, or wealth, and both Houses of Congress are directly elected. The only exception to this is the disenfranchisement of convicted felons, and in some states former felons as well.

Currently, the national representation of territories and the federal district of Washington, D.C., in Congress is limited: residents of the District of Columbia are subject to federal laws and federal taxes, but their only congressional representative is a non-voting delegate. Residents of U.S. territories have varying rights; for example, residents of Puerto Rico do not pay federal taxes (on local income), but cannot vote for President and have no voting representatives in Congress.

The state governments tend to have the greatest influence over most Americans' daily lives because they handle the issues most relevant for an individual in that state. The state also goes through budget cuts at any time the economy is faltering, which the collective public they are responsible for feel most.

Each state has its own written constitution, government, and code of laws. There are sometimes great differences in law and procedure between individual states, concerning issues such as property, crime, health, and education. The highest elected official of each state is the Governor. Each state also has an elected state legislature (bicameralism is a feature of every state except Nebraska), whose members represent the voters of the state. Each state maintains its own state court system. In some states, supreme and lower court justices are elected by the people; in others, they are appointed, as they are in the federal system.

As a result of the Supreme Court case Worcester v. Georgia, Indian tribes are considered "domestic dependent nations" that operate as sovereign governments subject to federal authority but, generally and where possible, outside of the influence of state governments. Hundreds of laws, executive orders, and court cases have modified the governmental status of tribes vis-à-vis individual states, but the two have continued to be recognised as separate bodies. Tribal capacity to operate robust governments varies, from a simple council used to manage all aspects of tribal affairs, to large and complex bureaucracies with several branches of government. Tribes are empowered to form their own governments, with power resting in elected tribal councils, elected tribal chairpersons, or religiously appointed leaders (as is the case with pueblos). Tribal citizenship (and voting rights) is generally restricted to individuals of native descent, but tribes are free to set whatever membership requirements they wish.

The institutions that are responsible for local government in states are typically town, city, or county boards, water management districts, fire management districts, library districts, and other similar governmental units which make laws that affect their particular area. These laws concern issues such as traffic, the sale of alcohol, and the keeping of animals. The highest elected official of a town or city is usually the mayor. In New England, towns operate in a direct democratic fashion, and in some states, such as Rhode Island and Connecticut, counties have little or no power, existing only as geographic distinctions. In other areas, county governments have more power, such as to collect taxes and maintain law enforcement agencies.

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Federal Deposit Insurance Corporation Improvement Act of 1991

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), passed during the Savings and loan crisis, strengthened the power of the Federal Deposit Insurance Corporation.

It allowed the FDIC to borrow directly from the Treasury department and mandated that the FDIC resolve failed banks using the least-costly method available. It also ordered the FDIC to assess insurance premiums according to risk and created new capital requirements.

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Franklin D. Roosevelt

Franklin Delano Roosevelt (January 30, 1882 – April 12, 1945), often referred to by his initials FDR, was the 32nd President of the United States. He was a central figure of the 20th century during a time of worldwide economic crisis and world war. Elected to four terms in office, he served from 1933 to 1945 and is the only U.S. president to have served more than two terms. Franklin D. Roosevelt and Theodore Roosevelt were fifth cousins but were close. FDR's wife Eleanor Roosevelt was Theodore's orphaned niece who he gave away in marriage to "cousin Franklin" in 1905.

During the Great Depression of the 1930s, Roosevelt created the New Deal to provide relief for the unemployed, recovery of the economy, and reform of the economic and banking systems, through various agencies, such as the Works Project Administration (WPA), National Recovery Administration (NRA), and the Agricultural Adjustment Administration (AAA). Although recovery of the economy was incomplete until World War II, several programs he initiated, such as the Federal Deposit Insurance Corporation (FDIC), Tennessee Valley Authority (TVA), and the U.S. Securities and Exchange Commission (SEC), continue to have instrumental roles in the nation's commerce. Some of his other legacies include the Social Security system and the National Labor Relations Board (NLRB).

As Britain warred with the Axis nations, Roosevelt provided Lend-Lease aid to Winston Churchill and the British war effort before America's entry into World War II in December, 1941. On the home front, he introduced price controls and rationing. After the attack on Pearl Harbor by forces of the Japanese Empire and after the declaration of war on the United States by Nazi Germany and by Fascist Italy, Roosevelt introduced internment of Japanese Americans, German Americans, and Italian Americans.

Roosevelt led the United States as it became the 'Arsenal of Democracy'. Roosevelt, working closely with his aide Harry Hopkins, made the United States the principal arms supplier and financier of the Allies. America had a vast expansion of industry, the achievement of full employment, and new opportunities opened for African Americans and women. The new Conservative coalition, arguing disappearing unemployment, closed most relief programs like the Works Progress Administration (WPA) and Civilian Conservation Corps. As the Allies neared victory, Roosevelt played a critical role in shaping the post-war world, particularly through the Yalta Conference and the creation of the United Nations. Later, alongside the United States, the Allies defeated Germany, Italy, and Japan.

Roosevelt's election to the presidency brought about a realignment political scientists call the Fifth Party System. His aggressive use of the federal government created a New Deal coalition which dominated the Democratic Party until the late 1960s. Roosevelt introduced new taxes that affected all income groups. Conservatives vehemently fought back, but Roosevelt usually prevailed until he tried to pack the Supreme Court in 1937. He and his wife, Eleanor Roosevelt, remain touchstones for modern American liberalism. Roosevelt's administration redefined American liberalism and realigned the Democratic Party based on his New Deal coalition of labor unions; farmers; ethnic, religious and racial minorities; intellectuals; the South; big city machines; and the poor and workers on relief. Roosevelt has been consistently ranked by scholars as one of the greatest U.S. Presidents.

Roosevelt is an anglicized form of the Dutch surname 'van Rosevelt,' or 'van Rosenvelt', meaning 'field of roses.' Although some use an Anglicized spelling pronunciation of IPA: /ˈruːzəvɛlt/, that is, with the vowels of rue and felt, Franklin used , with the vowel of the English rose.

One of the wealthiest and oldest families in New York State, the Roosevelts distinguished themselves in areas other than politics. Franklin's first cousin, Ellen Roosevelt, was the 1890 U.S. Open Championships women's singles and doubles tennis champion and is a member of the International Tennis Hall of Fame.

His mother named him after her favorite uncle Franklin Delano. The progenitor of the Delano family in the Americas of 1621 was Philippe de la Noye, the first Huguenot to land in the New World, whose family name was anglicized to Delano.

Franklin Delano Roosevelt was born on January 30, 1882 in the Hudson Valley town of Hyde Park, New York. His father, James Roosevelt, and his mother, Sara, were each from wealthy old New York families, of Dutch and French ancestry respectively. Franklin was their only child. His paternal grandmother, Mary Rebecca Aspinwall, was a first cousin of Elizabeth Monroe, wife of the fifth U.S. President, James Monroe. One of his ancestors was John Lothropp, also an ancestor of Benedict Arnold and Joseph Smith, Jr. One of his distant relatives from his mother's side is the author Laura Ingalls Wilder. His maternal grandfather Warren Delano II, a descendant of Mayflower passengers Richard Warren, Isaac Allerton, Degory Priest, and Francis Cooke, during a period of twelve years in China made more than a million dollars in the tea trade in Macau, Canton, and Hong Kong, but upon returning to the United States, he lost it all in the Panic of 1857. In 1860, he returned to China and made a fortune in the notorious but highly profitable opium trade supplying opium-based medication to the U. S. War Department during the American Civil War but not exclusively.

Roosevelt grew up in an atmosphere of privilege. Sara was a possessive mother, while James was an elderly and remote father (he was 54 when Franklin was born). Sara was the dominant influence in Franklin's early years. Frequent trips to Europe made Roosevelt conversant in German and French. He learned to ride, shoot, row, and play polo and lawn tennis.

Roosevelt went to Groton School, an Episcopal boarding school in Massachusetts. He was heavily influenced by its headmaster, Endicott Peabody, who preached the duty of Christians to help the less fortunate and urged his students to enter public service. Roosevelt went to Harvard, where he lived in luxurious quarters and was a member of the Alpha Delta Phi fraternity. He was also president of The Harvard Crimson daily newspaper. While he was at Harvard, his fifth cousin Theodore Roosevelt became president, and Theodore's vigorous leadership style and reforming zeal made him Franklin's role model and hero. In 1902, he met his future wife Eleanor Roosevelt, Theodore's niece, at a White House reception (they had previously met as children, but this was their first serious encounter). Eleanor and Franklin were fifth cousins, once removed. They were both descended from Claes Martensz van Rosenvelt (Roosevelt), who arrived in New Amsterdam (Manhattan) from the Netherlands in the 1640s. Roosevelt's two grandsons, Johannes and Jacobus, began the Long Island and Hudson River branches of the Roosevelt family, respectively. Eleanor and Theodore Roosevelt were descended from the Johannes branch, while FDR came from the Jacobus branch.

Roosevelt entered Columbia Law School in 1905, but dropped out (never to graduate) in 1907 because he had passed the New York State Bar exam. In 1908, he took a job with the prestigious Wall Street firm of Carter Ledyard & Milburn, dealing mainly with corporate law.

Franklin and Lucy maintained a formal correspondence, but they did not begin to see each other again until 1941. Lucy was then given the code name "Mrs. Johnson" by the Secret Service. Not until the 1960s was the affair publicly known.

In 1919 the Roosevelts lived next door to Attorney General A. Mitchell Palmer, and were present when a Galleanist anarchist was killed in the botched bombing that was an attempt to assassinate Palmer. Also in 1919, Franklin Roosevelt helped Éamon de Valera and his fledgling Irish Republican Army get around export laws for shipping arms used against British troops in the Irish War of Independence.

The five surviving Roosevelt children all led tumultuous lives overshadowed by their famous parents. They had among them nineteen marriages, fifteen divorces, and twenty-nine children. All four sons were officers in World War II and were decorated, on merit, for bravery. Two of them were elected to the U.S. House of Representatives—FDR, Jr. served three terms representing the Upper West Side of Manhattan, and James served six terms representing the 26th district in California—but none were elected to higher office despite several attempts.

In 1910, Roosevelt ran for the New York State Senate from the district around Hyde Park in Dutchess County, which had not elected a Democrat since 1884. He entered the Roosevelt name, with its associated wealth, prestige, and influence in the Hudson Valley, and the Democratic landslide that year carried him to the state capital of Albany, New York. Roosevelt entered the state house, January 1, 1911. He became a leader of a group of reformers who opposed Manhattan's Tammany Hall machine which dominated the state Democratic Party. Roosevelt soon became a popular figure among New York Democrats. He was reelected for a second term November 5, 1912, and resigned from the New York State Senate on March 17, 1913.

Franklin D. Roosevelt was appointed Assistant Secretary of the Navy by Woodrow Wilson in 1913. He served under Secretary of the Navy Josephus Daniels. In 1914, he was defeated in the Democratic primary election for the United States Senate by Tammany Hall-backed James W. Gerard. As assistant secretary, Roosevelt worked to expand the Navy and founded the United States Navy Reserve. Wilson sent the Navy and Marines to intervene in Central American and Caribbean countries. In a series of speeches in his 1920 campaign for Vice President, Roosevelt claimed that he, as Assistant Secretary of the Navy, wrote the constitution which the U.S. imposed on Haiti in 1915.

Roosevelt developed a life-long affection for the Navy. Roosevelt negotiated with Congressional leaders and other government departments to get budgets approved. He became an enthusiastic advocate of the submarine and also of means to combat the German submarine menace to Allied shipping: he proposed building a mine barrier across the North Sea from Norway to Scotland. In 1918, he visited Britain and France to inspect American naval facilities; during this visit he met Winston Churchill for the first time. With the end of World War I in November 1918, he was in charge of demobilization, although he opposed plans to completely dismantle the Navy. In July 1920, Roosevelt resigned as Assistant Secretary of the Navy.

The 1920 Democratic National Convention chose Roosevelt as the candidate for Vice President of the United States on the ticket headed by Governor James M. Cox of Ohio, helping build a national base, but the Cox-Roosevelt ticket was heavily defeated by Republican Warren G. Harding in the presidential election. Roosevelt then retired to a New York legal practice and joined the newly-organized New York Civitan Club, but few doubted that he would soon run for public office again.

In August 1921, while the Roosevelts were vacationing at Campobello Island, New Brunswick, Roosevelt contracted an illness, at the time believed to be polio, which resulted in his total and permanent paralysis from the waist down. For the rest of his life, Roosevelt refused to accept that he was permanently paralyzed. He tried a wide range of therapies, including hydrotherapy, and, in 1926, he purchased a resort at Warm Springs, Georgia, where he founded a hydrotherapy center for the treatment of polio patients which still operates as the Roosevelt Warm Springs Institute for Rehabilitation. After he became President, he helped to found the National Foundation for Infantile Paralysis (now known as the March of Dimes). His leadership in this organization is one reason he is commemorated on the dime.

At the time, Roosevelt was able to convince many people that he was in fact getting better, which he believed was essential if he was to run for public office again. Fitting his hips and legs with iron braces, he laboriously taught himself to walk a short distance by swiveling his torso while supporting himself with a cane. In private, he used a wheelchair, but he was careful never to be seen in it in public. He usually appeared in public standing upright, supported on one side by an aide or one of his sons.

In 2003, a peer-reviewed study found that it was more likely that Roosevelt's paralytic illness was actually Guillain-Barré syndrome, not poliomyelitis.

Roosevelt maintained contacts and mended fences with the Democratic Party during the 1920s, especially in New York. Although he made his name as an opponent of New York City's Tammany Hall machine, Roosevelt moderated his stance. He helped Alfred E. Smith win the election for governor of New York in 1922. Roosevelt gave nominating speeches for Smith at the 1924 and 1928 Democratic conventions. In 1928, as the Democratic Party presidential nominee in the 1928 election, Smith in turn asked Roosevelt to run for governor. While Smith lost the Presidency in a landslide, and was even defeated in his home state, Roosevelt was narrowly elected governor.

As a reform governor, he established a number of new social programs, and he was advised by Frances Perkins and Harry Hopkins.

In the 1930 election campaign, to be re-elected, Roosevelt needed the good will of the Tammany Hall machine in New York City; however, his Republican opponent, Charles H. Tuttle, was using Tammany Hall's corruption as an election issue. As the election approached, Roosevelt initiated investigations of the sale of judicial offices. He was elected to a second term by a margin of more than 700,000 votes.

Roosevelt was a strong supporter of scouting, beginning in 1915. In 1924, he became president of the New York City Boy Scout Foundation and led the development of Ten Mile River Boy Scout Camp between 1924–1928 to serve the Scouts of New York City. As governor in 1930, the Boy Scouts of America (BSA) honored him with their highest award for adults, the Silver Buffalo Award, which is conferred in recognition of distinguished support of youth on a national level. Later, as U.S. president, Roosevelt was honorary president of the BSA and attended the first national jamboree in Washington, D.C. in 1937.

Roosevelt's strong base in the most populous state made him an obvious candidate for the Democratic nomination, which was hotly contested since it seemed that incumbent Herbert Hoover would be vulnerable in the 1932 election. Al Smith was supported by some city bosses, but had lost control of the New York Democratic party to Roosevelt. Roosevelt built his own national coalition with personal allies such as newspaper magnate William Randolph Hearst, Irish leader Joseph P. Kennedy, Sr., and California leader William Gibbs McAdoo. When Texas leader John Nance Garner switched to FDR, he was given the presidential nomination.

The election campaign was conducted under the shadow of the Great Depression in the United States, and the new alliances which it created. Roosevelt and the Democratic Party mobilized the expanded ranks of the poor as well as organized labor, ethnic minorities, urbanites, and Southern whites, crafting the New Deal coalition. During the campaign, Roosevelt said: "I pledge you, I pledge myself, to a new deal for the American people", coining a slogan that was later adopted for his legislative program as well as his new coalition.

Economist Marriner Eccles observed that "given later developments, the campaign speeches often read like a giant misprint, in which Roosevelt and Hoover speak each other's lines." Roosevelt denounced Hoover's failures to restore prosperity or even halt the downward slide, and he ridiculed Hoover's huge deficits. Roosevelt campaigned on the Democratic platform advocating "immediate and drastic reductions of all public expenditures," "abolishing useless commissions and offices, consolidating bureaus and eliminating extravagances reductions in bureaucracy," and for a "sound currency to be maintained at all hazards." On September 23, Roosevelt made the gloomy evaluation that, "Our industrial plant is built; the problem just now is whether under existing conditions it is not overbuilt. Our last frontier has long since been reached." Hoover damned that pessimism as a denial of "the promise of American life ... the counsel of despair." The prohibition issue solidified the wet vote for Roosevelt, who noted that repeal would bring in new tax revenues.

Roosevelt won 57% of the vote and carried all but six states. Historians and political scientists consider the 1932-36 elections a realigning election that created a new majority coalition for the Democrats, thus transforming American politics and starting what is called the "New Deal Party System" or (by political scientists) the Fifth Party System.

After the election, Roosevelt refused Hoover's requests for a meeting to come up with a joint program to stop the downward spiral and calm investors, claiming it would tie his hands. The economy spiralled downward until the banking system began a complete nationwide shutdown as Hoover's term ended. In February 1933, Roosevelt escaped an assassination attempt by Giuseppe Zangara (which killed Chicago Mayor Anton Cermak sitting next to him). Roosevelt leaned heavily on his "Brain Trust" of academic advisors, especially Raymond Moley when designing his policies; he offered cabinet positions to numerous candidates (sometimes two at a time), but most declined. The cabinet member with the strongest independent base was Cordell Hull at State. William Hartman Woodin at Treasury, was soon replaced by the much more powerful Henry Morgenthau, Jr.

Historians categorized Roosevelt's program as "relief, recovery and reform." Relief was urgently needed by tens of millions of unemployed. Recovery meant boosting the economy back to normal. Reform meant long-term fixes of what was wrong, especially with the financial and banking systems. Roosevelt's series of radio talks, known as fireside chats, presented his proposals directly to the American public.

Roosevelt's "First 100 Days" concentrated on the first part of his strategy: immediate relief. From March 9 to June 16, 1933, he sent Congress a record number of bills, all of which passed easily. To propose programs, Roosevelt relied on leading Senators such as George Norris, Robert F. Wagner and Hugo Black, as well as his Brain Trust of academic advisers. Like Hoover, he saw the Depression caused in part by people no longer spending or investing because they were afraid.

His inauguration on March 4, 1933 occurred in the middle of a bank panic, hence the backdrop for his famous words: "The only thing we have to fear is fear itself." The very next day Congress passed the Emergency Banking Act which declared a "bank holiday" and announced a plan to allow banks to reopen. However, the number of banks that opened their doors after the "holiday" was less than the number that had been open before. This was his first proposed step to recovery. To give Americans confidence in the banks, Roosevelt signed the Glass-Stegall Act that created the Federal Deposit Insurance Corporation.

Roosevelt tried to keep his campaign promise by cutting the regular federal budget, including 40% cuts to veterans' benefits and cuts in overall military spending. He removed 500,000 veterans and widows from the pension rolls and slashed benefits for the remainder. Protests erupted, led by the Veterans of Foreign Wars. Roosevelt held his ground, but when the angry veterans formed a coalition with Senator Huey Long and passed a huge bonus bill over his veto, he was defeated. He succeeded in cutting federal salaries and the military and naval budgets. He reduced spending on research and education.

Roosevelt also kept his promise to push for repeal of Prohibition. In April 1933, he issued an Executive Order redefining 3.2% alcohol as the maximum allowed. That order was preceded by Congressional action in the drafting and passage of the 21st Amendment, which was ratified later that year.

After the 1934 Congressional elections, which gave Roosevelt large majorities in both houses, there was a fresh surge of New Deal legislation. These measures included the Works Progress Administration (WPA) which set up a national relief agency that employed two million family heads. However, even at the height of WPA employment in 1938, unemployment was still 12.5% according to figures from Michael Darby. The Social Security Act, established Social Security and promised economic security for the elderly, the poor and the sick. Senator Robert Wagner wrote the Wagner Act, which officially became the National Labor Relations Act. The act established the federal rights of workers to organize unions, to engage in collective bargaining, and to take part in strikes.

While the First New Deal of 1933 had broad support from most sectors, the Second New Deal challenged the business community. Conservative Democrats, led by Al Smith, fought back with the American Liberty League, savagely attacking Roosevelt and equating him with Marx and Lenin. But Smith overplayed his hand, and his boisterous rhetoric let Roosevelt isolate his opponents and identify them with the wealthy vested interests that opposed the New Deal, setting Roosevelt up for the 1936 landslide. By contrast, the labor unions, energized by the Wagner Act, signed up millions of new members and became a major backer of Roosevelt's reelections in 1936, 1940 and 1944.

Government spending increased from 8.0% of gross national product (GNP) under Hoover in 1932 to 10.2% of the GNP in 1936. Because of the depression, the national debt as a percentage of the GNP had doubled under Hoover from 16% to 33.6% of the GNP in 1932. While Roosevelt balanced the "regular" budget, the emergency budget was funded by debt, which increased to 40.9% in 1936, and then remained level until World War II, at which time it escalated rapidly. The national debt rose under Hoover, held steady under FDR until the war began, as shown on chart 1.

Deficit spending had been recommended by some economists, most notably by John Maynard Keynes of Britain. Some economists in retrospect have argued that the National Labor Relations Act and Agricultural Adjustment Administration were ineffective policies because they relied on price fixing. The GNP was 34% higher in 1936 than in 1932 and 58% higher in 1940 on the eve of war. That is, the economy grew 58% from 1932 to 1940 in 8 years of peacetime, and then grew 56% from 1940 to 1945 in 5 years of wartime. However, the economic recovery did not absorb all the unemployment Roosevelt inherited. Unemployment fell dramatically in Roosevelt's first term, from 25% when he took office to 14.3% in 1937. Afterward, however, it increased to 19.0% in 1938 ('a depression within a depression'), 17.2% in 1939 because of various added taxation (Undistributed profits tax in Mar. 1936, and the Social Security Payroll Tax 1937, plus the effects of the Wagner Act; the Fair Labor Standards Act and a blizzard of other federal regulations), and stayed high until it almost vanished during World War II when the previously unemployed were conscripted, taking them out of the potential labor supply number.

During the war, the economy operated under such different conditions that comparison with peacetime is impossible. However, Roosevelt saw the New Deal policies as central to his legacy, and in his 1944 State of the Union Address, he advocated that Americans should think of basic economic rights as a Second Bill of Rights.

The U.S. economy grew rapidly during Roosevelt's term. However, coming out of the depression, this growth was accompanied by continuing high levels of unemployment; as the median joblessness rate during the New Deal was 17.2%. Throughout his entire term, including the war years, average unemployment was 13%. Total employment during Roosevelt's term expanded by 18.31 million jobs, with an average annual increase in jobs during his administration of 5.3%.

Roosevelt did not raise income taxes before World War II began; however payroll taxes were also introduced to fund the new Social Security program in 1937. He also got Congress to spend more on many various programs and projects never before seen in American history. However, under the revenue pressures brought on by the depression, most states added or increased taxes, including sales as well as income taxes. Roosevelt's proposal for new taxes on corporate savings were highly controversial in 1936–37, and were rejected by Congress. During the war he pushed for even higher income tax rates for individuals (reaching a marginal tax rate of 91%) and corporations and a cap on high salaries for executives. In order to fund the war, Congress broadened the base so that almost every employee paid federal income taxes, and introduced withholding taxes in 1943.

The rejection of the League of Nations treaty in 1919 marked the dominance of isolationism from world organizations in American foreign policy. Despite Roosevelt's Wilsonian background, he and Secretary of State Cordell Hull acted with great care not to provoke isolationist sentiment. Roosevelt's "bombshell" message to the world monetary conference in 1933 effectively ended any major efforts by the world powers to collaborate on ending the worldwide depression, and allowed Roosevelt a free hand in economic policy.

The main foreign policy initiative of Roosevelt's first term was the Good Neighbor Policy, which was a re-evaluation of U.S. policy towards Latin America. Since the Monroe Doctrine of 1823, this area had been seen as an American sphere of influence. American forces were withdrawn from Haiti, and new treaties with Cuba and Panama ended their status as United States protectorates. In December 1933, Roosevelt signed the Montevideo Convention on the Rights and Duties of States, renouncing the right to intervene unilaterally in the affairs of Latin American countries.

In the 1936 presidential election, Roosevelt campaigned on his New Deal programs against Kansas Governor Alf Landon, who accepted much of the New Deal but objected that it was hostile to business and involved too much waste. Roosevelt and Garner won 60.8% of the vote and carried every state except Maine and Vermont. The New Deal Democrats won even larger majorities in Congress. Roosevelt was backed by a coalition of voters which included traditional Democrats across the country, small farmers, the "Solid South," Catholics, big city machines, labor unions, northern African Americans, Jews, intellectuals and political liberals. This coalition, frequently referred to as the New Deal coalition, remained largely intact for the Democratic Party until the 1960s.

In dramatic contrast to the first term, very little major legislation was passed in the second term. There was a United States Housing Authority (1937), a second Agricultural Adjustment Act and the Fair Labor Standards Act (FLSA) of 1938, which created the minimum wage. When the economy began to deteriorate again in late 1937, Roosevelt responded with an aggressive program of stimulation, asking Congress for $5 billion for WPA relief and public works. This managed to eventually create a peak of 3.3 million WPA jobs by 1938.

The Supreme Court was the main obstacle to Roosevelt's programs during his second term, overturning many of his programs. In particular in 1935 the Court unanimously ruled that the National Recovery Act (NRA) was an unconstitutional delegation of legislative power to the president. Roosevelt stunned Congress in early 1937 by proposing a law allowing him to appoint five new justices, a "persistent infusion of new blood." This "court packing" plan ran into intense political opposition from his own party, led by Vice President Garner, since it seemed to upset the separation of powers and give the President control over the Court. Roosevelt's proposals were defeated. The Court also drew back from confrontation with the administration by finding the Labor Relations and Social Security Acts to be constitutional. Deaths and retirements on the Supreme Court soon allowed Roosevelt to make his own appointments to the bench with little controversy. Between 1937 and 1941, he appointed eight justices to the court.

Roosevelt had massive support from the rapidly growing labor unions, but now they split into bitterly feuding AFL and CIO factions, the latter led by John L. Lewis. Roosevelt pronounced a "plague on both your houses," but the disunity weakened the party in the elections from 1938 through 1946.

Determined to overcome the opposition of conservative Democrats in Congress (mostly from the South), Roosevelt involved himself in the 1938 Democratic primaries, actively campaigning for challengers who were more supportive of New Deal reform. His targets denounced Roosevelt for trying to take over the Democratic party and used the argument that they were independent to win reelection. Roosevelt failed badly, managing to defeat only one target, a conservative Democrat from New York City.

In the November 1938 election, Democrats lost six Senate seats and 71 House seats. Losses were concentrated among pro-New Deal Democrats. When Congress reconvened in 1939, Republicans under Senator Robert Taft formed a Conservative coalition with Southern Democrats, virtually ending Roosevelt's ability to get his domestic proposals enacted into law. The minimum wage law of 1938 was the last substantial New Deal reform act passed by Congress.

The rise to power of dictator Adolf Hitler in Germany aroused fears of a new world war. In 1935, at the time of Italy's invasion of Ethiopia, Congress passed the Neutrality Act, applying a mandatory ban on the shipment of arms from the U.S. to any combatant nation. Roosevelt opposed the act on the grounds that it penalized the victims of aggression such as Ethiopia, and that it restricted his right as President to assist friendly countries, but public support was overwhelming so he signed it. In 1937, Congress passed an even more stringent act, but when the Sino-Japanese War broke out in 1937, public opinion favored China, and Roosevelt found various ways to assist that nation.

In October 1937, he gave the Quarantine Speech aiming to contain aggressor nations. He proposed that warmongering states be treated as a public health menace and be "quarantined." Meanwhile he secretly stepped up a program to build long range submarines that could blockade Japan.

In May 1938, there occurred a failed coup by the fascist Integralista movement in Brazil. After the failed coup, the Brazilian government claimed that the German Ambassador, Dr. Karl Ritter had been involved in the coup attempt and declared him persona non grata. The Brazilian allegation of German support for the Integralista coup had a galvanizing impact on the Roosevelt administration as it led to fears that German ambitions were not confined to Europe, but rather to the whole world. This in turn led the Roosevelt administration to change its previous view of the Nazi regime as an unpleasant regime that was however basically not an American problem.

On September 4, 1938 in the midst of the great crisis in Europe that was to culminate in the Munich Agreement, during the unveiling of a plaque in France honoring Franco-American friendship, the American Ambassador, and close friend of Roosevelt’s William C. Bullitt stated that "France and the United States were united in war and peace," leading to much speculation in the press that if war did break over Czechoslovakia, then the United States would join the war on the Allied side. Roosevelt disallowed this interpretation of Bullitt’s remarks in a press conference on September 9, stating it was “100% wrong” the U.S. would join a “stop-Hitler bloc” under any circumstances, and made it quite clear in the event of German aggression against Czechoslovakia, the U.S. would remain neutral. Upon Neville Chamberlain’s return to London from the Munich Conference, Roosevelt sent him a two word telegram reading “Good Man”, which has been the subject of much debate, with the majority opinion arguing that the telegram was meant to be congratulatory with the minority opinion opposing that interpretation.

In October 1938, Roosevelt opened secret talks with the French on how to bypass American neutrality laws and allowed the French to buy American aircraft to make up for productivity deficiencies in the French aircraft industry. The French Premier Édouard Daladier commented in October 1938 that "If I had three or four thousand aircraft Munich would never have happened", and was most anxious to buy American war planes as the only way of strengthening the French Air Force. A major problem in the Franco-American talks was how the French were to pay for the American planes, and how to bypass the American neutrality acts In addition, the American Johnson Act of 1934 which forbade loans to the nations that had defaulted on their World War I debts was a further complicating factor (France had defaulted on its World War I debts in 1932). In February 1939, the French offered to cede their possessions in the Caribbean and the Pacific together with a lump sum payment of ten billion francs, in exchange for the unlimited right to buy on credit American aircraft. After torturous negotiations, an arrangement was worked out in the spring of 1939 allowing the French to place huge orders with the American aircraft industry; though most of the aircraft ordered had not arrived in France by 1940, Roosevelt arranged for French orders to be diverted to the British.

When World War II broke out in 1939, Roosevelt rejected the Wilsonian neutrality stance and sought ways to assist Britain and France militarily. He began a regular secret correspondence with the First Lord of Admiralty Winston Churchill in September 1939 discussing ways of supporting Britain. Roosevelt forged a close personal relationship with Churchill, who became Prime Minister of the UK in May 1940.

In April 1940 Germany invaded Denmark and Norway, followed by invasions of the Netherlands, Belgium, Luxembourg, and France in May. The German victories in Western Europe left Britain vulnerable to invasion. Roosevelt, who was determined that Britain not be defeated, took advantage of the rapid shifts of public opinion. The fall of Paris shocked American opinion, and isolationist sentiment declined. A consensus was clear that military spending had to be dramatically expanded. There was no consensus on how much the U.S. should risk war in helping Britain. In July 1940, FDR appointed two interventionist Republican leaders, Henry L. Stimson and Frank Knox, as Secretaries of War and the Navy respectively. Both parties gave support to his plans to rapidly build up the American military, but the isolationists warned that Roosevelt would get the nation into an unnecessary war with Germany. He successfully urged Congress to enact the first peacetime draft in United States history in 1940 (it was renewed in 1941 by one vote in Congress). Roosevelt was supported by the Committee to Defend America by Aiding the Allies, and opposed by the America First Committee.

Roosevelt used his personal charisma to build support for intervention. America should be the "Arsenal of Democracy," he told his fireside audience. On September 2, 1940, Roosevelt openly defied the Neutrality Acts by passing the Destroyers for Bases Agreement, which gave 50 American destroyers to Britain in exchange for military base rights in the British Caribbean islands and Newfoundland. This was a precursor of the March 1941 Lend-Lease agreement which began to direct massive military and economic aid to Britain, the Republic of China, and later the Soviet Union. For foreign policy advice, Roosevelt turned to Harry Hopkins, who became his chief wartime advisor. They sought innovative ways to help Britain, whose financial resources were exhausted by the end of 1940. Congress, where isolationist sentiment was in retreat, passed the Lend-Lease Act in March 1941, allowing the U.S. to give Britain, China and later the Soviet Union military supplies. Congress voted to commit to spend $50 billion on military supplies from 1941–45. In sharp contrast to the loans of World War I, there would be no repayment after the war. Roosevelt was a lifelong free trader and anti-imperialist, and ending European colonialism was one of his objectives.

The two-term tradition had been an unwritten rule (until the 22nd Amendment after his presidency) since George Washington declined to run for a third term in 1796, and both Ulysses S. Grant and Theodore Roosevelt were attacked for trying to obtain a third non-consecutive term. FDR systematically undercut prominent Democrats who were angling for the nomination, including two cabinet members, Secretary of State Cordell Hull and James Farley, Roosevelt's campaign manager in 1932 and 1936, Postmaster General and Democratic Party chairman. Roosevelt moved the convention to Chicago where he had strong support from the city machine (which controlled the auditorium sound system). At the convention the opposition was poorly organized but Farley had packed the galleries. Roosevelt sent a message saying that he would not run, unless he was drafted, and that the delegates were free to vote for anyone. The delegates were stunned; then the loudspeaker screamed "We want Roosevelt... The world wants Roosevelt!" The delegates went wild and he was nominated by 946 to 147. The new vice presidential nominee was Henry A. Wallace, the liberal intellectual who was Secretary of Agriculture.

In his campaign against Republican Wendell Willkie, Roosevelt stressed both his proven leadership experience and his intention to do everything possible to keep the United States out of war. He won the 1940 election with 55% of the popular vote and 38 of the 48 states. A shift to the left within the Administration was shown by the naming of Henry A. Wallace as Vice President in place of the conservative Texan John Nance Garner, who had become a bitter enemy of Roosevelt after 1937.

Roosevelt's third term was dominated by World War II, in Europe and in the Pacific. Roosevelt slowly began re-armament in 1938 since he was facing strong isolationist sentiment from leaders like Senators William Borah and Robert Taft who supported re-armament. By 1940, it was in high gear, with bipartisan support, partly to expand and re-equip the United States Army and Navy and partly to become the "Arsenal of Democracy" supporting the United Kingdom, French Third Republic, the Republic of China and (after June 1941), the Soviet Union. As Roosevelt took a firmer stance against the Axis Powers, American isolationists—including Charles Lindbergh and America First—attacked the President as an irresponsible warmonger. Unfazed by these criticisms and confident in the wisdom of his foreign policy initiatives, FDR continued his twin policies of preparedness and aid to the Allied coalition. On December 29, 1940, he delivered his Arsenal of Democracy fireside chat, in which he made the case for involvement directly to the American people, and a week later he delivered his famous Four Freedoms speech in January 1941, further laying out the case for an American defense of basic rights throughout the world.

The military buildup spurred economic growth. By 1941, unemployment had fallen to under 1 million. There was a growing labor shortage in all the nation's major manufacturing centers, accelerating the Great Migration of African Americans workers from the Southern United States, and of underemployed farmers and workers from all rural areas and small towns. The homefront was subject to dynamic social changes throughout the war, though domestic issues were no longer Roosevelt's most urgent policy concerns.

When Nazi Germany invaded the Soviet Union in June 1941, Roosevelt extended Lend-Lease to the Soviets. During 1941, Roosevelt also agreed that the U.S. Navy would escort Allied convoys as far east as Great Britain and would fire upon German ships or submarines (U-boats) of the Kriegsmarine if they attacked Allied shipping within the U.S. Navy zone. Moreover, by 1941, U.S. Navy aircraft carriers were secretly ferrying British fighter planes between the UK and the Mediterranean war zones, and the British Royal Navy was receiving supply and repair assistance at American naval bases in the United States.

Thus, by mid-1941, Roosevelt had committed the U.S. to the Allied side with a policy of "all aid short of war." Roosevelt met with Winston Churchill, Prime Minister of the United Kingdom on August 14, 1941, to develop the Atlantic Charter in what was to be the first of several wartime conferences. In July 1941, Roosevelt ordered Henry Stimson, Secretary of War to begin planning for total American military involvement. The resulting "Victory Program," under the direction of Albert Wedemeyer, provided the President with the estimates necessary for the total mobilization of manpower, industry, and logistics to defeat the "potential enemies" of the United States. The program also planned to dramatically increase aid to the Allied nations and to have ten million men in arms, half of whom would be ready for deployment abroad in 1943. Roosevelt was firmly committed to the Allied cause and these plans had been formulated before the Attack on Pearl Harbor by the Empire of Japan.

After Japan occupied northern French Indochina in late 1940, he authorized increased aid to the Republic of China. In July 1941, after Japan occupied the remainder of Indo-China, he cut off the sales of oil. Japan thus lost more than 95% of its oil supply. Roosevelt continued negotiations with the Japanese government. Meanwhile he started shifting the long-range B-17 bomber force to the Philippines.

On December 4, 1941, The Chicago Tribune revealed "Rainbow Five," a top-secret war plan drawn up at President Franklin Roosevelt's order. "Rainbow Five" called for a 10-million man army invading Europe in 1943 on the side of Britain and Russia.

On December 6, 1941, President Roosevelt read an intercepted Japanese message and told his assistant Harry Hopkins, "This means war." He never warned Admiral Husband Kimmel or Lt. Gen. Walter Short after reception of the message before the Pearl Harbor attack.

Despite the wave of anger that swept across the U.S. in the wake of Pearl Harbor, Roosevelt decided from the start that the defeat of Nazi Germany had to take priority. On December 11, 1941, this strategic Europe First decision was made easier to implement when Germany and Italy declared war on the United States. Roosevelt met with Churchill in late December and planned a broad informal alliance between the U.S., Britain, China and the Soviet Union, with the objectives of halting the German advances in the Soviet Union and in North Africa; launching an invasion of western Europe with the aim of crushing Nazi Germany between two fronts; and saving China and defeating Japan.

There was some pressure to intern German Americans and Italian Americans even while the United States declared its neutrality.

After the attack on Pearl Harbor by forces of the Japanese Empire, there was growing pressure to imprison Japanese and Japanese-Americans on the West Coast of the United States. This pressure grew due to fears of terrorism, espionage, and/or sabotage. On February 19, 1942, President Roosevelt signed Executive Order 9066 which imprisoned the "Issei" (first generation of Japanese who immigrated to the US) and their children, "Nisei" (who were US citizens).

After both Nazi Germany and Fascist Italy unilaterally declared war on the United States, German Americans and Italian Americans were also interned more widely.

The "Big Three" (Roosevelt, Churchill, and Joseph Stalin), together with Chiang Kai-shek cooperated informally in which American and British troops concentrated in the West, Russian troops fought on the Eastern front, and Chinese, British and American troops fought in the Pacific. The Allies formulated strategy in a series of high profile conferences as well as contact through diplomatic and military channels. Roosevelt guaranteed that the U.S. would be the "Arsenal of Democracy" by shipping $50 billion of Lend Lease supplies, primarily to Britain and also to the USSR, China and other Allies.

The U.S. War Department took the view that the quickest way to defeat Germany was to invade France across the English Channel. Churchill, wary of the casualties he feared this would entail, favored a more indirect approach, advancing northwards from the Mediterranean Sea. Roosevelt rejected this plan. Stalin advocated opening a Western front at the earliest possible time, as the bulk of the land fighting in 1942–44 was on Soviet soil.

The Allies undertook the invasions of French Morocco and Algeria (Operation Torch) in November 1942, of Sicily (Operation Husky) in July 1943, and of Italy (Operation Avalanche) in September 1943. The strategic bombing campaign was escalated in 1944, pulverizing all major German cities and cutting off oil supplies. It was a 50-50 British-American operation. Roosevelt picked Dwight D. Eisenhower, and not George Marshall, to head the Allied cross-channel invasion, Operation Overlord that began on D-Day, June 6, 1944. Some of the most costly battles of the war ensued after the invasion, and the Allies were blocked on the German border in the "Battle of the Bulge" in December 1944. When Roosevelt died on April 12, 1945, Allied forces were closing in on Berlin.

Meanwhile, in the Pacific, the Japanese advance reached its maximum extent by June 1942, when the U.S. Navy scored a decisive victory at the Battle of Midway. American and Australian forces then began a slow and costly progress called island hopping or leapfrogging through the Pacific islands, with the objective of gaining bases from which strategic airpower could be brought to bear on Japan and from which Japan could ultimately be invaded. Roosevelt gave way in part to insistent demands from the public and Congress that more effort be devoted against Japan; he always insisted on Germany first.

By late 1943, it was apparent that the Allies would ultimately defeat Nazi Germany, and it became increasingly important to make high-level political decisions about the course of the war and the postwar future of Europe. Roosevelt met with Churchill and the Chinese leader Chiang Kai-shek at the Cairo Conference in November 1943, and then went to Tehran to confer with Churchill and Stalin. At the Tehran Conference, Roosevelt and Churchill told Stalin about the plan to invade France in 1944, and Roosevelt also discussed his plans for a postwar international organization. For his part, Stalin insisted on the redrawing the frontiers of Poland. Stalin supported Roosevelt's plan for the United Nations and promised to enter the war against Japan 90 days after Germany was defeated.

By the beginning of 1945, however, with the Allied armies advancing into Germany and the Soviets in control of Poland, the issues had to come out into the open. In February, Roosevelt, despite his steadily deteriorating health, traveled to Yalta, in the Soviet Crimea, to meet again with Stalin and Churchill. After the war Polish Americans criticized the Yalta Conference for legitimizing Soviet control of Eastern Europe. However, Roosevelt had already lost control of the situation, and put all his hopes on postwar deals with Stalin. A desire to maintain a good working relationship with Stalin during the war may have been a factor in Roosevelt's reluctance to agree with Churchill's proposal to aid the Poles in the Warsaw Uprising against Stalin's wishes and suppressing a report by George Earle that assigned responsibility for the Katyń Massacre to the Soviets.

Aware of the risk that Roosevelt would die during his fourth term, the party regulars insisted that Henry A. Wallace, who was seen as too pro-Soviet, be dropped as Vice President. After considering James F. Byrnes of South Carolina, and being turned down by Indiana Governor Henry F. Schricker, Roosevelt replaced Wallace with the little-known Senator Harry S. Truman. In the 1944 election, Roosevelt and Truman won 53% of the vote and carried 36 states, against New York Governor Thomas E. Dewey.

The President left the Yalta Conference on February 12, 1945, and flew to Egypt and boarded the USS Quincy operating on the Great Bitter Lake near the Suez Canal. Aboard Quincy, the next day he met with Farouk I, king of Egypt, and Haile Selassie, emperor of Ethiopia. On February 14, he held a historic meeting with King Abdulaziz, the founder of Saudi Arabia, a meeting which holds profound significance in U.S.-Saudi relations even today. After a final meeting between Roosevelt and Prime Minister Winston Churchill, Quincy steamed for Algiers, arriving February 18, at which time Roosevelt conferred with American ambassadors to Britain, France and Italy. At Yalta, Lord Moran, Winston Churchill's physician, commented on Roosevelt's ill health: "He is a very sick man. He has all the symptoms of hardening of the arteries of the brain in an advanced stage, so that I give him only a few months to live".

On March 30, 1945, Roosevelt went to Warm Springs to rest before his anticipated appearance at the founding conference of the United Nations. On the afternoon of April 12, Roosevelt said, "I have a terrific headache" and was carried into his bedroom. The doctor diagnosed that he had suffered a massive cerebral hemorrhage. Later that day, he died. As Allen Drury later said, “so ended an era, and so began another.” An editorial by The New York Times declared, "Men will thank God on their knees a hundred years from now that Franklin D. Roosevelt was in the White House," after Roosevelt's death.

At the time he collapsed, Roosevelt had been sitting for a portrait painting by the artist Elizabeth Shoumatoff, resulting in the famous Unfinished Portrait of FDR.

In his latter years at the White House, Roosevelt was increasingly overworked and his daughter Anna Roosevelt Boettiger had moved in to provide her father companionship and support. Anna had also arranged for her father to meet with his former mistress, the now widowed Lucy Mercer Rutherfurd. Shoumatoff, who maintained close friendships with both Roosevelt and Mercer, rushed Mercer away to avoid negative publicity and implications of infidelity. When Eleanor heard about her husband's death, she was also faced with the news that Anna had been arranging these meetings with Mercer and that Mercer had been with Franklin when he died.

Roosevelt's death was met with shock and grief across the U.S. and around the world. His declining health had not been known to the general public. Roosevelt had been president for more than 12 years, longer than any other person, and had led the country through some of its greatest crises to the impending defeat of Nazi Germany and to within sight of the defeat of Japan as well.

As was his wish, Roosevelt was buried in the Rose Garden of the Springwood estate, the Roosevelt family home in Hyde Park. After her death in November 1962, Eleanor was buried next to him.

Less than a month after his death, on May 8, came the moment Roosevelt fought for: V-E Day. President Harry Truman, who turned 61 that day, dedicated V-E Day and its celebrations to Roosevelt's memory, paying tribute to his commitment to ending the war in Europe. He also kept flags across the U.S. at half-staff for the remainder of the 30-day mourning period, again to pay tribute to Roosevelt's commitment to ending the war in Europe.

Roosevelt's record on civil rights has been the subject of much controversy. He was a hero to large minority groups, especially African-Americans, Catholics, and Jews. African-Americans and Native Americans fared well in the New Deal relief programs although they were not allowed to hold significant leadership roles in the WPA and CCC. Roosevelt needed the support of Southern Democrats for his New Deal programs, and he therefore decided not to push for anti-lynching legislation that might threaten his ability to pass his highest priority programs. Roosevelt was highly successful in attracting large majorities of African-Americans, Jews, and Catholics into his New Deal coalition. Beginning in 1941 Roosevelt issued a series of executive orders designed to guarantee racial, religious, and ethnic minorities a fair share of the new wartime jobs. He pushed for admission of African-Americans into better positions in the military. In 1942 Roosevelt made the final decision in ordering the internment of Japanese, Italian, and German Americans (many not released until well after the War's end) during World War II. Beginning in the 1960s he was charged with not acting decisively enough to prevent or stop the Holocaust which killed 6 million Jews. Critics cite episodes such as when, in 1939, the 936 Jewish refugees on board the SS St. Louis were denied asylum and not allowed into the United States.

President Roosevelt appointed eight Justices to the Supreme Court of the United States, more than any other President except George Washington, who appointed ten. By 1941, eight of the nine Justices were Roosevelt appointees. Harlan Fiske Stone was elevated to Chief Justice from the position of Associate Justice by Roosevelt.

Roosevelt's appointees would not share ideologies, and some, like Hugo Black and Felix Frankfurter, would become "lifelong adversaries." Frankfurter even labeled his more liberal colleagues Rutledge, Murphy, Black, and Douglas as part of an "Axis" of opposition to his judicially conservative agenda.

Roosevelt has been consistently ranked as one of the greatest U.S. presidents in historical rankings, alongside Abraham Lincoln and George Washington.

A 1999 survey by C-SPAN found that by a wide margin academic historians consider Abraham Lincoln, George Washington and Roosevelt the three greatest presidents, consistent with other surveys. Roosevelt is the sixth most admired person from the 20th century by US citizens, according to Gallup.

Both during and after his terms, critics of Roosevelt questioned not only his policies and positions, but also the consolidation of power that occurred because of his lengthy tenure as president, his service during two major crises, and his enormous popularity. The rapid expansion of government programs that occurred during Roosevelt's term redefined the role of the government in the United States, and Roosevelt's advocacy of government social programs was instrumental in redefining liberalism for coming generations.

Roosevelt firmly established the United States' leadership role on the world stage, with pronouncements such as his Four Freedoms speech, forming a basis for the active role of the United States in the war and beyond.

After Franklin's death, Eleanor Roosevelt continued to be a forceful presence in U.S. and world politics, serving as delegate to the conference which established the United Nations and championing civil rights. Many members of his administration played leading roles in the administrations of Truman, Kennedy and Johnson, each of whom embraced Roosevelt's political legacy.

Roosevelt's home in Hyde Park is now a National historic site and home to his Presidential library. His retreat at Warm Springs, Georgia is a museum operated by the state of Georgia. His summer retreat on Campobello Island is maintained by the governments of both Canada and the United States as Roosevelt Campobello International Park; the island is accessible via the Franklin Delano Roosevelt Bridge.

The Roosevelt Memorial is located in Washington, D.C. next to the Jefferson Memorial on the Tidal Basin, and Roosevelt's image appears on the Roosevelt dime. Many parks and schools, as well as an aircraft carrier and a Paris subway station and hundreds of streets and squares both across the US and the rest of the world have been named in his honor.

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